Development Without Borders

May 6, 2006

What is globalization? More than ever before, groups and individuals are interacting directly across borders without involving the state. This happens partly due to new technology and partly because states have found that prosperity is better secured by releasing the creative energies of their people than by restricting them.

The benefits of globalization are obvious: faster growth, higher standards of living, and new opportunities. However, globalization's benefits are very unequally distributed; the global market is not yet underpinned by shared social objectives, and if all of today's poor follow the same path that brought the rich to prosperity, the earth's resources will soon be exhausted. The challenge we face is to ensure that globalization becomes a positive force for all people instead of leaving billions in squalor.

If we are to get the most out of globalization, we must learn how to provide better governance at the local, national, and international levels. We must think afresh about how we manage our joint activities and our shared interests, since so many challenges that we confront today are beyond the reach of any state acting on its own.

This should not be seen as a future of world government or the eclipse of nation-states. On the contrary, states will draw strength from each other by acting together within the framework of common institutions based on shared rules and values. Governments must work together to make these changes possible, but governments alone cannot make them happen. Much of the heavy lifting will be done by private investment and charitable foundations.

The best ideas, however, will come from nongovernmental sources: from academic researchers, nonprofit organizations, business, the media, and the arts. These elements compose civil society, and they have a vital role to play.

At the UN Millennium Summit in September 2000, world leaders resolved to halve three figures: the number of people whose income is less than one US dollar a day, the proportion of people who suffer from hunger, and the proportion of people who are unable to reach or afford safe drinking water. They resolved to accomplish these goals by 2015. History will judge this generation by what it did to fulfill that pledge.

Success in achieving sustained growth depends on expanding access to the opportunities of globalization. That in turn depends in large measure on the quality of governance a country enjoys. Countries can only compete in the global market if their people benefit from the rule of law, effective state institutions, transparency and accountability in the management of public affairs, and respect for human rights. Their people must have a say in the decisions that affect their lives.

If developing countries succeed in creating the right economic and social environment, new technology can put many opportunities within their reach. That is especially true of information technology, which does not require vast amounts of hardware, financial capital, or even energy, and which is relatively environment-friendly. What information technology does require is brain power–the one commodity that is equally distributed among the peoples of the world. So for a relatively small investment–for example, an investment in basic education–we can bring all kinds of knowledge within reach of the world's poor and enable poor countries to leapfrog some of the long and painful stages of development that other nations had to go through.

In short, there is much that poor countries can do to help themselves. But rich countries have an indispensable role to play. For wealthy nations to preach the virtues of open markets to developing countries is mere hypocrisy if they do not open their own markets to those countries' products or stem the flooding of the world market with subsidized food exports that make it impossible for farmers in developing countries to compete. Nor can they expect developing countries to protect the global environment, unless they are ready to alter their own irresponsible patterns of production and consumption.

Developing countries must be helped to export their way to prosperity. Everyone now agrees that the burden of debt must be lifted from the poorest countries, but developed countries have not yet come forward with sufficient resources to alleviate this burden. Nations, whether in debt or not, need help to reach the stage where they can produce goods and services that the rest of the world wants to buy. Many also need help in resolving destructive conflicts and rebuilding a peaceful, productive society.

Long ago, all members of the Organization for Economic Cooperation and Development committed 0.7 percent of their gross domestic product to development aid. Very few made good on that commitment. Private companies, as well as governments, have an obligation to consider the interests of the poor when making investment choices and when pricing their products. Companies are the largest beneficiaries of globalization; it is in their interest to make this trend sustainable, by helping it work for all.

Only when the lives of ordinary men, women, and children in cities and villages around the world are made better will we know that globalization is becoming inclusive, allowing everyone to share in its opportunities. This is the key to eliminating world poverty.